Would you buy a starter home and upgrade, or your dream home, as a first-time homeowner?


I was talking to a friend the other day, who told me that his wife was looking at new houses to buy.

I asked him why, and he said it was because she had always considered their first home to be a starter home.

No matter what, they would upgrade to a new home at least every 5 years, banking on the equity put into the previous homes to help them finance a bigger, and bigger home.

Their current home is about 2000 square feet, and I found it perfectly sized for the two of them (no kids) and in quite a nice neighbourhood.

They have no reason to move — their jobs are stable, and the house is in a decent condition.

Originally when I was more convinced that I would buy a house, I never thought about my first home being a starter home. I just figured if it was the right size and the right price, I’d just have to make do.

It doesn’t seem to make any financial sense to me to buy a starter home, and then to keep upgrading or essentially adding to your mortgage (debt) just for a bigger and bigger home, especially when you think about the 30-year mortgage just to pay off your starter home.

To me, switching every year just makes the debt larger and would make you want to renovate and buy more things (furniture and new decorations) to make each subsequent house a home.

When you throw in the costs of home inspections and realtors, it becomes even more unattractive to keep upgrading every 5 years.

Am I missing something other than an emotional high of a new, bigger and better home?


Reality for The Upcoming House Owners

I don’t really get the fever but bigger and better when it’s not necessary. But when I look at the houses’ price around here, I know the upcoming house owners might be forced to buy starter homes. My sister-in-law is a good example. She lives in a Montreal apartment. She likes it and don’t want to move just yet. She and her man are both self-employed. Meaning most banks don’t trust their revenues! 😉 They intend to buy something in a couple years, when they’ll start their family.

To be honest, it will eventually be a necessity for them. As a mother of three, I know they won’t have enough space for more than a couple months baby in their current apartment. And because of their jobs reality, they might not get financially approved for the house of their dreams too.

In such cases, I understand the existence of starter homes. Otherwise, you lose me!!

Would you start with a starter home and upgrade, or the home of your dreams and be done with it?

About the Author

Just a girl trying to find a balance between being a Shopaholic and a Saver. I cleared $60,000 in 18 months earning $65,000 gross/year. Now I am self-employed, and you can read more about my story here, or visit my other blog: The Everyday Minimalist.